Question: please solve this problem without using Excel and show all steps. 1. A company issue bonds. The risk-free interest rate is 0.04. The annual probability

please solve this problem without using Excel and show all steps.

1. A company issue bonds. The risk-free interest rate is 0.04. The annual probability of default on these bonds is 0.04. The recovery rate on defaulted bonds is 40%. Calculate the debt cost of capital

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